California push to avert higher gas prices stalls

SACRAMENTO &GT;&GT; Lawmakers from both parties are pushing to halt an increase in the price of gasoline and other fuels expected to hit consumers in January, but their efforts appear to be dead with just a week to go in the legislative session.

A pair of bills — one sponsored by Democrats, the other by Republicans — seek to delay or exempt gasoline, diesel fuel, natural gas and other consumer fuels from California's 2006 greenhouse gas emissions law.

The nonpartisan Legislative Analyst's Office said this month that fuel prices are likely to increase by 13 cents to 20 cents per gallon by 2020, but the agency warned the increase could be as high as 50 cents a gallon.

The analyst's letter was in response to an inquiry by Assemblyman Henry Perea, D-Fresno. His AB69 would delay adding consumer fuels to the state's cap-and-trade market until Jan. 1, 2018. The bill is co-authored by nine fellow Democrats, while 16 of the Assembly's 55 Democrats signed his letter in June asking the California Air Resources Board to reconsider its regulations.

On Friday, Senate President Pro Tem Darrell Steinberg sent a letter to Perea saying he'll block the bill from consideration during the Legislature's final week.

Supporters of California's greenhouse gas reduction law say one of the best ways to reduce harmful emissions is to place a higher price on the use of carbon-based fuels, which in theory would force consumers to use less or switch to alternatives, such as electric or hybrid vehicles.

"I share your concern about the costs of combatting carbon emissions. But the cost of doing nothing is much greater," Steinberg said in the letter, provided to The Associated Press. "If we are serious about reducing fuel costs and righting the public health and economic wrongs facing our constituents, we must wean ourselves off fossil fuels and invest in clean transportation alternatives and in low income communities as we did in this year's budget."

Another bill, SB1079 by Sen. Andy Vidak, R-Hanford, would permanently exempt transportation fuels from the state's cap-and-trade program. It was co-authored by 29 Assembly and Senate Republicans.

Both bills have been stalled in the Senate Rules Committee. On Thursday, Democrats who control the Senate defeated Vidak's attempt to attach his exemption to an unrelated bill.

"Gasoline is not a luxury for most Californians; it's a necessity," Vidak said, saying the increase would harm poor Californians the most.

Assemblyman Scott Wilk, R-Santa Clarita, said Vidak's bill at least deserves a vote from the full Legislature, even it fails.

"It just reinforces the fact that we're just completely out of step up here in terms of what's going on in the state," Wilk said.

Steinberg, D-Sacramento, was among the first lawmakers to raise concerns about the coming price hikes, prompting serious discussion over the issue in February.

Steinberg, other Democratic leaders and Gov. Jerry Brown eventually agreed in the budget approved in June to spend part of air pollution fees for affordable housing, public transit and energy-conservation efforts to reduce greenhouse gas emissions.

The Senate leader is satisfied with the budget agreement and with assurances by the Air Resources Board "that they had price volatility under control," Steinberg spokesman Rhys Williams said. But he noted that does not account for natural fluctuations in the market or decisions by the oil industry to pass its expected higher costs on to consumers.

Removing transportation fuels now would be disruptive not only to the state but also to utilities and other businesses that already are preparing for the price increases, said Stanley Young, speaking on behalf of the air board and the governor.

"One of our goals is to reduce our dependence on gasoline and diesel and thereby minimize the fact that we're subject to roller-coaster prices," he said.

While pump prices are likely to increase, the board projects that overall fuel expenses will drop by $400 per person per year by 2020. That assumes there are more electric- and hydrogen-driven vehicles available, and that consumers buy them, Young said.

It also assumes that more people walk, bike or take mass transit as a result of state-funded improvements and incentives funded by revenue from the cap-and-trade fees.